According to the Federal Emergency Management Agency, (FEMA) floods are the most frequently occurring natural disaster in the United States. Floods can often cause severe damage to properties that require significant time and money to repair. In fact, the National Center for Environmental Information, (NCEI) reported that the damage costs associated with large-scale flood events in 2019 totaled at least $20 billion. Fortunately, you can protect your home by purchasing flood insurance.
What Is Covered With Flood Insurance?
Before discussing who benefits the most from having flood insurance, it’s important to specify what this type of policy covers. According to the National Flood Insurance Program, (NFIP) which is managed by FEMA, a typical policy includes both building coverage and contents coverage.
If you are a homeowner, this means the items covered include your property’s foundation, (i.e. walls and ceiling) its plumbing and electrical systems, appliances, and personal belongings such as clothing, furniture, and electronics. The NFIP offers up to $250,000 for building coverage and $100,000 for contents. (These coverage limits are significantly higher for business owners: the NFIP provides up to $500,000 for both building and contents coverage.) You can also purchase private flood insurance, which is not funded by the federal government.
How Do You Know If You’re At Risk For A Flood?
You can learn your property’s level of risk of flooding (low-risk, high-risk, or moderate-risk zone) by consulting FEMA’s Flood Maps or contacting your local insurance agency. If you live near a prominent body of water, you are likely located in a high-risk flood zone. Many people falsely believe they do not need insurance if they live in a “low-risk” flood zone. However, flood maps change over time due to factors such as evolving weather patterns and dam constructions. These maps also assist mortgage lenders with the process of deciding whether they will require flood insurance for a loan.
Who Needs Flood Insurance?
Flood insurance may be obligatory depending on your location. Per federal law, insured or regulated mortgage lenders need to require insurance coverage for homes situated in high-risk flooding areas. Additionally, you may be required to obtain insurance if you have received federal disaster aid in the past. Certain lenders also require you to purchase a flood insurance policy regardless of the type of flood risk zone you live in.
Saving Money On Flood Insurance
As expensive as flood insurance may seem, this type of coverage is undoubtedly worth carrying. You can also save money on your flood insurance policy by taking three simple steps: comparing rates, increasing your deductible, and continuously maintaining coverage. Here is a close look at each of these steps.
When weighing the benefits and disadvantages of different insurance policies, be sure to compare rates, especially when looking at NFIP versus private policies. Your local insurance agent can help you select your best option by offering quotes for all of the policies you are considering.
Increase Your Deductible
Aside from comparing rates, another highly effective way of saving money on insurance is by increasing your deductible. Just remember that most insurance policies typically have two deductibles: one for building coverage and another for contents coverage.
Maintain Your Coverage
Regardless of whether or not you move to a new home, it’s highly recommended that you continuously maintain your insurance coverage. If your home is “grandfathered” into a lower-risk flood zone than FEMA’s most recent flood maps show, (i.e. it was “built in compliance with the flood map that was in effect at the time of construction,” per FEMA) this can help keep your premiums down.
Get Flood Insurance From JMG
Reach out to the experts at John M. Glover for more information on who needs insurance. Since our founding in 1916, we have been dedicated to serving the insurance needs of clients throughout Connecticut, New Jersey, New York, Massachusetts, and Hawaii. As an independent agency, we work closely with several insurance providers that have proven their reliability over the years.
If you live in a high-risk flood zone, you may be required to purchase insurance. JMG’s policies include both building and contents coverage. Policies provided by the NFIP typically have a 30-day wait time requirement, but private policies generally have shorter waiting periods. Regardless of your location and specific needs and budget, JMG’s agents will strive to help you save as much money as possible on insurance.